The GCC is a Tourism Juggernaut
When Nick Hall of the Digital Tourism Think Tank in Brussels invited me to join a workshop on helping European tourism boards and hospitality chains better understand the Middle East market, I didn’t hesitate to accept. That the chat would end up happening virtually over Skype was courtesy of the modern day embassy visa process we all love.
My key trends that help define the Middle East challenge are the following:
What makes the Middle Eastern populace unique — particularly the UAE — is it’s diversity and transience. Over 200 nationalities in a modern cosmopolitan nation isn’t exactly new (think London or New York). However, the ‘cultural average’ that emerges from this mix is relatively new, because the UAE and other Gulf nations are not melting pots, but a tossed salad — each demographic segment remains very much alive and true to its own cultural norms; they simply happen to co-exist, but do not co-create one mega behavioural pattern. As a result, consumer segmentation is increasingly difficult and almost always relatively futile beyond the market research stage. Instead of trying to club audiences together, there is opportunity in the Middle East to target the diversity by offering variety.
Online, yes. Committed, not yet.
The connected Middle East consumer is young, well-traveled, opinionated and trigger-happy with a significant disposable income. In the MENA region, research suggests 65% of typical consumers dip in online at least once during the purchase cycle — ahead of global average of 62%, and India at 64%, while just behind China at 68%. But only 21% actually transact entirely online. Also, unlike the rest of the world, the Middle East loves to pay for their online order in cash, on delivery (60% MENA vs 39% globally). This is a greater opportunity than challenge for the hospitality and tourism sector, because it gives brands a higher hit rate than most other parts of the world in engaging with customers with great storytelling, rather than driving actual, direct, online sales (the typical measure of campaign success).
Life Inside a Mobile Device
Take Dubai in the UAE as an example. We live amongst 9.34 million people. Strangely, the number of active mobile subscriptions racks up a count of 18.88 million connections — so, the average Dubai consumer owns/has/hides/uses 2.1 phones each. With a 75% mobile penetration, that’s just absurd. The opportunity exists in harnessing this always-on-the-phone habit and creating mobile experiences for brands that exist before, during and after products or services interact with the customer. Travel brands need to think of creating products (even pseudo-products) rather than remain services that are easily forgotten without a totem to recall them with. Social media is just one such golden goose, but increasingly saturated with agency-speak and one-way communication rather than real dialog or meaningful personal experiences.
Loyalty to Product, not Service
The previous trend dove-tails into the increasing amount of research pointing towards the unsurprising trend of brand loyalty being led by products, not services. Services create experiences, products create everything a service does, and then some. Brands that exist as pure experiences need totems (yes, I’m referencing Inception) to remind them, and continue to engage in, the experience. In this sense of the term, apps are products. Whether they peddle your brand or just delight your customer with something that loosely fits within your brand ethos, apps are toys that are memorable if done correctly. Middle Eastern brand loyalty is hard to buy, but once past that barrier, the emotional connect is significantly higher than a lot of the developed markets globally.
Ego Trumps Function
It’s no discovery that a frenzy of consumers across most industries now seek personalisation in some form or another — and are happy paying a serious premium to get it. Personalisation can be thrifty, but where the UAE and other GCC markets deviate is the luxury personalisation they demand. Brand loyalty can switch relatively easily, as long as bragging rights come with an alternative brand. Canada’s (unofficial) national coffee chain Tim Hortons arrived in the region with its first steps in Dubai, in bed with one of the region’s leading retail groups, Apparel. Copy-pasting their cafe experience to the Middle East would have never allowed them to make any noise, let alone become a serious contender to the mighty Starbucks regional supremacy. Instead, when Timmy’s opened, espressos were on the menu unlike in its motherland, the chandeliers were chrome and the furniture, deep mahogany — a far cry from the tube-lit student/trucker/homeless hang-out across Canada.
Brands, whether nations vying for travellers, hotel chains competing for bookings, or retail chains looking to play ball in the region, need to ask themselves one serious question:
Are you married to the idea of your brand, its legacy and proven value proposition… or are you willing to change whatever it takes to be relevant in the Middle East?